1. Defending Energy Security by Responding to Energy Challenge
Radyan K.A Sopiyan
ABSTRACT
Geothermal energy has long been considered as one of the main source of energy of the
world. It can be argued that commercial geothermal energy exploitation is dependent to CO2
emission and cost comparatively better than an instantly renewable energy source, such as, solar,
wind, or biomass energy.
Indonesia is a country rich in natural resources, including geothermal. With 40% of the
world’s resource, it is the biggest geothermal resource in the world and the third largest geothermal
installed capacity in the world after the United States and the Philippines. Even so, the primary
source of energy in Indonesia is fossil energy, which is going to run out in the next few years. In
order to anticipate the depletion, geothermal energy development should begin to be accelerated.
This energy has many advantages compared to fossil energy. Where fossil energy is non-renewable,
geothermal is renewable, environmentally friendly, and, most importantly, domestic base energy.
In order to accelerate this potential renewable energy source, the Government of Indonesia
(GOI) has to put more commitment into this sector. Consequently, when the energy security is
unreliable, geothermal energy is ready as its substitution.
INTRODUCTION
Fossil fuels are limited; they are classified as non-renewable resources because they take
millions of years to form and reserves are being depleted much faster than the new ones being
formed, not to mention the price that’s getting higher day by day.
Geothermal is likely the other energy which comes from the Earth. The elements of a
geothermal system works like boiling water in a kettle. The water seeps into the hot rock located in
the subsurface. In other words, the hot rock (reservoir) is likened to “stove” from which the steam
can be produced over and over again. Steam then used by geothermal power plants to generate
electricity by being directed to rotate a turbine that activates a generator which produce electricity.
At the moment, the single buyer for this renewable energy is state-owned company, PLN.
The development of geothermal energy needs a huge number of investments, from its preliminary
survey, exploration, until production, not to mention legal stages that need to be taken. Despite of
that, it’s still more vital compared to its non-renewable counterpart. This energy business is
considered a long-term strategy because depletion occurs even longer than thirty years.

2. AVAILABILITY OF RESOURCES
As the world’s third largest installed capacity of geothermal energy, GOI should be more
conscious to fast-track the legal step to start producing geothermal energy. In fact, fossil fuels have
met its own difficulties as the main source of energy this past century. The following graphs will
explain more in regards of fuel energy resource’s supply and demand.
Figure-1: Indonesia’s oil supply and consumption

3. Figure-2: Indonesia’s coal production and consumption
Figure-3: Indonesia’s gas production and consumption

4. Figure-4 : Comparison of fuel consumption
According to the above graphs and the statement of Chief of Sub-directorate of Oil and Gas
Transportation from Energy and Mineral Source Ministry, Isnaini, the capacity of our refinery is 1.15
million barrels per day. Indonesia’s oil production can only process 649,000 barrels per day. In fact,
today’s needs of fuels reach as many as 1.25 million barrels per day. Indonesia’s crude oil reserves
are as much as 3.6 billion barrels. Assuming that crude oil production is equal to 649,000 barrels per
day, mathematically, these reserves would run out in less than 16 years. Indonesia’s oil industry is
heading into sunset period. The consumption graph is ascending, while the production graph is
descending. These lines are crossing, indicating that supply no longer meets the demand. This crisis
is affecting the price of oil.
However, gas and coal are increasing in production. Less attention the government gives in
exploration and exploitation of these sources would soon turn into a crisis. When net export of coal
and gas arises and has a significant difference with domestic use, Indonesia’s energy security is
threatened.
From short- up to mid-term period, coal and gas are still going to be “prima donna” of the
energy industry due to its availability, production simplicity, affordability, and competitive price. In
business term, coal and gas are still going to be the main priority after oil surpasses its sunset period.
However, this isn’t going to last. Coal reserves are as much as 18.70 billion tons, while gas reserves
104.4 trillion cubic feet. In a couple of decades, these are going to run out too, much like its
predecessor. To provide a better life for its people, supply has to meet demand. What Indonesia
needs to maintain and strengthen its energy security, not to mention to ensure domestic energy
sustainability, is renewable energy.
Based on the above chart, consumption fuel of renewable energy is only 1% of existing
potential reserve. On the other hand, the consumption of fossil fuels, such as oil, gas, and coal, is still

5. the majority of the whole. The question that shows up that 1% is the maximum production that can
be produce which affect the consumption are limited, or it might produce further so that the
consumption could more than 1%. GOI needs to put more commitment to the development of
geothermal because in the near future fossil fuels consumption is going to decrease due to its
depletion and renewable energy source, which has a big potential to substitute fossil energy, is going
to increase. Implementation of geothermal energy, if consistent, is going to take at least seven years
in the process due to regulation. So when fossil energy era is over, geothermal is ready to take over.
DEVELOPMENT OF GEOTHERMAL ENERGY IN INDONESIA
To date, geothermal development in Indonesia isn’t up to its potential yet. There are seven
mining excavation area which have started producing and mostly dominated by Pertamina. It is still
possible for other private business companies to develop this energy sector as future preparation
since current energy availability isn’t going to last for a long period of time.
The GOI is currently accelerate and speed up the development of the vast geothermal
resources potential available in the country by revising the regulation from the MEMR (Ministry of
Energy and Mineral Resources) No. 05/2009 about The Guidelines for Electricity Purchasing Price
by PT. PLN from Cooperation and Other Business Entities.
Although Indonesia is among only a handful of countries to develop geothermal energy,
utilization of geothermal potential has proceeded very slow and is facing difficult challenges and
uncertainty. Indonesia can now be considered as an “awake giant” now that improvements have been
made in several sectors. There are several stages that need to be fulfilled in order to acquire the
mining authorization as shown in the graph below.
The master plan has been made for Indonesia’s economic development from 2011 until 2025,
but the target hasn’t been reached yet. The government doesn’t seem to put enough effort into this
sector. It was originally planned to install as much as 4,000MW production installed capacity in
2014, but in reality, it has only been installed as much as 1,297MW. The target for 2025, which is
more than 9,000MW, seems out of reach, but not impossible if only the government acts fast.

6. Figure-5 : Geothermal development process
There are four main challenges: the problem of concessions area overlapping, while most of
its potential resources is in protected forest area (conservation area); the regulation, which
categorizes geothermal as mining activity, thus making it more challenging to develop geothermal in
forest area; the power price, announced during bidding process and no renegotiating process can be
made, making it economically inflexible since geothermal production could take time until seven
years, or even more; and, last but not least, investment problems, with less investors interested, it
falls on the government to give incentive in this energy sector. In regards of legal problems, there are
several stages that need to be reviewed to ease development without giving chance to uncompetitive
and unqualified developers.
CONCLUSIONS
Geothermal energy is one of the most potential alternative sources of energy besides the
conventional source energy, fossil fuels. It has so many differences from the fossil fuels; renewable,
reliable, sustainable, and environmentally friendly. It is the source of energy of the future. However,
we can never make full use and take full advantage of it if we don’t start from now on. Geothermal
needs years of implementation before can be fully taken advantage of. In the next seven years, the
probability is that gas will reach plateau stage, what more oil, has reached sunset stage even now,
although coal still be able to be relied on. But depending on coal is not the best move, be it
environment or business wise.

7. The GOI needs to start focusing on reviewing regulation for the development of geothermal
energy by becoming the unified governance and also controlling for competitive developers which
can commit that they are capable of developing this potential source of energy. With this
thoughtfulness it’s not impossible Indonesia is going to be the leader in geothermal energy.